Risky Business for Rural Hospitals

Christopher Cheney, August 8, 2016

How rural healthcare organizations are faring in non-Medicaid expansion states.

How rural healthcare organizations are faring in non-Medicaid expansion states.

This article first appeared in the July/August 2016 issue of HealthLeaders magazine.

Hospitals in rural areas of the country are feeling a sharp financial pinch in states that have not expanded their Medicaid programs under the Patient Protection and Affordable Care Act.

Community hospitals in rural counties of Tennessee, one of the states that have opted not to embrace Medicaid expansion, are facing financial pressure that could be relieved if more of their low-resource patients had Medicaid coverage. "In our health systems, they manage it. They have figured it out. Where it's really hitting is our rural hospitals," says Craig Becker, president of the Tennessee Hospital Association. "We've lost six rural hospitals in the last year, and we're going to lose another one this year."

In economically disadvantaged Tennessee communities, many nonelderly adults are either reliant on Medicaid for their health coverage or fall into the "self-pay" category, Becker says. "We only get about 5% of payment for self-pay patients."

Medicaid is a public form of medical insurance jointly funded by the states and the federal government. Under the PPACA, states can expand their Medicaid programs with federal financial assistance to include all adults in families with incomes below 138% of the federal poverty level.


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As of this year, 31 states including the District of Columbia have expanded Medicaid through provisions of the PPACA. Nineteen states have not expanded Medicaid under the federal law: Alabama, Florida, Georgia, Idaho, Kansas, Maine, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Wisconsin, and Wyoming.

Christopher Cheney

Christopher Cheney is the senior finance editor at HealthLeaders Media.

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